pandian s (ofice superintendant ) 08 August 2020

Time bar limitation for housing loan

I have taken a housing loan from a nationalised bank in the year 2006. Due to my poor and constrained financial condition I could not repay since 2009. Can I construct the loan and whether limitation act can apply for the loan ? Kindly clarify

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Quick Summary

This discussion addresses whether a housing loan taken in 2006, with repayments ceasing in 2009, is subject to the Limitation Act. Experts clarify that for mortgage loans, the Limitation Act's standard three-year period for pronotes doesn't apply. Instead, each instalment has its own limitation. Crucially, banks can enforce security interest and take possession of the property under the SARFAESI Act to recover dues, meaning the loan may not be time-barred. The best course of action is to negotiate with the bank for repayment.

3 Replies

Dr J C Vashista (Advocate) 09 August 2020

Discuss with your money lender.

No legal issue is involved for consideration and obligation of experts on this platform.

G.L.N. Prasad (Retired employee.) 09 August 2020

Bankers obtain term loan agreement and they might have taken adequate precautions to overcome such limitation aspects. Do not be overconfident that bankers can not proceed against you as the limitation period (According to you) was over by 2012. This is a mortgage loan and the title deeds must have been registered and the only way before you is talk with a banker and repay old installments and continue repaying installments. You can not raise a single rupee in the market from any financial institution when your account is NPA with a bank.

SIVARAMAPRASAD KAPPAGANTU (Retired Manager) 09 August 2020

I fully agree with Shri Prasad.

Having taken the loan it's your responsibility to repay it.

To reply specific query of limitation, please note it's not a pronote based loan and so 3 year limitation does not apply. It's an agreement based loan where each instalment has limitation.

Bank needn't file suit. They can take posession of the house purchased under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 abd dispose it to recover their dues.